Yahoo! CEO Sets Sale

Yahoo! already faces skepticism that it can compete with Google on the search front, and it may face additional pressure on its bottom line as niche Web sites try to capture some of the advertising dollars that had all gone to the big portals.

"They are only getting more competition as time goes on, and of course the growth rates have come down," says Phillip Remek, an analyst with Guzman & Co. who has one of the few underperform ratings on the stock.

Still, Yahoo! does have potential growth opportunities, such as in the expansion of its reach to mobile devices. Yahoo! on Tuesday introduced a new service with AT&T (T) and Cingular Wireless called AT&T Yahoo! Go. This allows people to access their Yahoo! services, including email and instant messaging, over their cell phones.

The company continues to be one of the strongest franchises on the Web, with the most unique visitors. Unlike Google, Yahoo! has a diversified revenue base from its range of services that range from fantasy football to Web personals.

"Yahoo! is much more entrenched with the larger advertisers," says Martin Pyykkonen, an analyst with Hoefer & Arnett, who rates Yahoo! strong buy.

>To order reprints of this article, click here: Reprints